Helsinki, Finland ? Before arriving here, I thought that the Cold War between the United States and the former Soviet Union belonged to history books, and that Washington and Moscow had long ceased to compete for geographic enclaves around the world. But now, I wonder.

From the moment I arrived in Finland, a prosperous 5.3 million population country bordering Russia, I was surprised by the impact of the recent Russian invasion of Georgia in this part of the world. Forget about the U.S. presidential race; The biggest front-page headlines in much of Europe these days are focused on the Russian invasion of Georgia following the Aug. 7 military operation by Georgian forces into the separatist region of South Ossetia.

Russia’s neighbors are terrified about what they see as a reawakening of the former Russian empire and the possibility that Moscow may invade more of its neighbors to restore its former might.

And they fear that the Bush administration’s active support for Georgia’s membership in NATO military alliance will further irk Moscow, and trigger a new Cold War.

Last week’s visit by Vice President Dick Cheney to Georgia, in which he said that Russia’s invasion had been universally condemned by “the free world,” was seen by European political commentators as a resurrection of Cold War rhetoric. Many here are already talking about “Cold War II.”

Could the new U.S.-Russian rivalry lead to a new super-power competition for allied countries in Latin America, I asked several academics. I posed this question because, coincidentally or not, there was a flurry of news about Russia’s growing involvement in Latin America in recent weeks:

¢ Venezuelan President Hugo Chavez, whose government has announced purchases of more than $4.5 billion in Russian arms over the past four years, said last Sunday that he will “welcome” Russian war ships that may want to make temporary stops in Venezuela. “Russia is rising up again as a great superpower,” Chavez said.

¢ Brazil’s government is scheduled to announce this week a new arms-production plan that, according to Strategic Affairs Minister Roberto Mangabeira Unger, will include a partnership with Russia to produce combat aircraft and rocket launchers. Russian President Dmitry Medvedev is likely to visit Brazil in November to sign these and other deals, diplomatic sources say.

¢ Russia’s daily newspaper Izvestia and the Novosti news agency quoted senior Russian officials in July as saying that Russia wants to establish a military base in Cuba, in apparent retaliation for Washington’s plans to set up missile-launching facilities in Poland and the Czech Republic. Russian defense officials later denied the report, and Izvestia issued a half-hearted retraction.

Several Scandinavian academics told me that the idea of “Cold War II” is a bit exaggerated because Russia’s military is in shambles. It’s much smaller and more disorganized than that of the former Soviet Union. And Russia’s activities in Latin America are a side-show, since Moscow is mainly interested in its own neighborhood, they say.

Nevertheless, there is what Sweden’s Uppsala University Russian expert Stefen Hedlund described as a “serious confrontation” between Russia and the United States, which will have a ripple effect in Latin America and the rest of the developing world.

“It’s absolutely part of the game,” Hedlund told me, referring to the reports of plans for Russian bases in Venezuela and Cuba. “It’s psychological warfare.”

Russian Prime Minister Vladimir Putin is drawing a line in the sand and saying, “No more countries going into NATO.”

Chris Arcos, a former top U.S. Homeland Security Department official, told me that “the Russians feel they are being encircled by the West and say, ‘Why the hell can’t we play the same game in Latin America?’ They need to prove that they are still in the superpower game.”

My opinion: This is bad news for Latin America. Granted, some of you may argue that a new Cold War would force Washington and Moscow to pay more attention to Latin America, and would allow some countries to play Washington and Moscow against each other for their own benefit.

But the dangers for the region far outstrip the potential benefits. As we reported in this column last month, South America has already increased military spending by 33 percent in real terms – after inflation – since 2000.

The last thing the region needs is to become even a distant turf of a new superpower struggle.

It would only help to increase arms expenditures, worsen regional tensions, scare away investments and produce greater poverty.